Preface to AFR Proceedings Issue

Citation

Paulson, N. (2013), "Preface to AFR Proceedings Issue", Agricultural Finance Review, Vol. 73 No. 1. https://doi.org/10.1108/afr.2013.42173aaa.001

Preface to AFR Proceedings Issue

Article Type: Guest editorial From: Agricultural Finance Review, Volume 73, Issue 1

In 2011, members of the NC-1177 regional research group moved forward in creating a new section within the Agricultural and Applied Economics Association (AAEA). The Agricultural Finance and Management Section’s research and outreach areas include the broad areas of finance and risk management. As the group’s first official activity, AFM members organized track sessions and an organized Symposium at the 2012 AAEA Annual Meetings held in Seattle, WA.

As part of AFM’s initial organization, members worked with Dr Calum Turvey, editor of the Agricultural Finance Review, on an agreement that would allow the section’s track and symposium papers to be published as proceedings in the journal. This makes AFM the only section within the AAEA organization to have a dedicated relationship with an academic journal, and the first seven papers in this issue are contributions from the participants in the first track sessions and symposia organized and co-sponsored by AFM membership. This commitment between the AFM section and the Agricultural Finance Review represents a unique opportunity to better disseminate the timely and important work being done by leading researchers in agricultural finance and risk, while expanding the scope and reach of both the section and the journal.

For 2012, the section’s sponsored track sessions and organized symposia focused on current topics related to farm real estate and historical farm and agribusiness returns. Sherrick, Mallory and Hopper address the recent rise in land values and heightened investment interest by examining historical farmland returns, comparing them with alternative investments, and discussing the potential for a farmland investment fund. Paulson and Schnitkey shifts focus towards land rental markets, providing a summary of trends in the types of rental agreements currently being used in practice, the rates for those contracts, and implications for the risk exposure facing grain producers. Kuethe, Ifft, and Morehart document a variety of available data sources on farmland values, and compare the performance of each in estimating the true, unobserved value of farmland using state space methods. Katchova and Enlow provide a historical view of the performance of publicly-traded agribusinesses, comparing and contrasting with returns earned by public companies in other industries.

The AFM section also co-sponsored a track session with the applied risk analysis section focused on the Federal Crop Insurance Program in the USA, and various challenges which are faced in crop insurance rating. Coble et al. examine the issue of weather-driven structural change over time, and its impact on the use of historical experience in crop insurance rating. Borman et al. discusses the use of small samples in estimating insurance rates based on experience, or historical loss cost ratios. Both papers provide methodological contributions to address insurance rating issues and are based on recent work commissioned by the risk management agency, and document some of the recent and important changes made to rating methodologies currently in use.

Nicholas Paulson